(Closed) SHHHHHHHHHHHH! I have a secret!

Hello bees! I have some potentially exciting news that I am anxiously waiting telling our friends and family, but my husband and I have agreed to keep it a secret until we know for sure. No, we’re not pregnant, but we might be able to buy a house!!!!

—-Skip down to the bold if you don’t want to read all the backstory, it’s not especially important.

My husband and I are currently living six hours apart (except for this week – hooray!) while I finish up classes at college. He works for people we know and he is currently living in one of their extra houses. One of the employer’s sons is going to move home and will be moving into the house with his girlfriend so my husband needs to move out in a couple of months. We do not have a lot of savings, so we don’t have a large chunk to plop down on a forever house and we would like to eventually build and customize what we want. We talked about buying a starter house and fixing it up just a tiny bit, but weren’t sure if we would be able to sell it in five years like we’re hoping. We live in a very rural area with a very slow market, houses sit for a long time if they’re not perfect because not many people are moving in and out. So we stopped at the bank to get their opinion. We happened to be able to talk to the president of the bank, who knows my husband and his family and my parents very well (my parents have banked here for the past 25 years and have a mortgage through them.) We talked to him about the possibility of buying the starter house and his thoughts on it and then he brought up a development in the town they’ve been starting. The houses there are four times the amount of the starter house.

He told us he would be willing to give us (a young, married, promising couple) a forty year mortgage, lower interest, only 3.5% down, and a ten year tax abatement! We would have to wait at least three years before we would have enough for 20% down a house this amazing. Yes, it is a 40 year mortgage, but that’s just to help us for the next couple years to keep the payments down. If we add on to the payments and not pay just the minimum, we could pay it off in 25 or 30 years easily, without coming close to stripping us financially. Oh, and if we decide RIGHT now that’s what we want to do, we can customize the house! They haven’t started the plans or anything so we would get to have some say in what we want!!! HOORAY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Unfortunately, he had to crunch the numbers and get back to us, which was supposed to be today, but we haven’t heard anything! Which is why I am extremely anxious and just spilling this all out on here. Now we’re waiting for a call from the bank and our pro pics, which are a week and a half late. Did I mention I am not a patient person? (As you can probably tell from the fact that I am telling complete strangers my exciting news when in all likelihood, I can tell everyone tomorrow? Hahaha)

I didn’t know 40 year loans still existed. Are you in the US? Intersesting. Just make sure that there are no pre-payment penalties or weird/larger than normal fees. Don’t let the excitement of the possibility of a house sweep away the double checking of all the fine print :-).

Congratulations! I hope it works out for you. I 2nd @crayfish: be sure to read the fine print, make sure there’s no hidden surprises. Luckily some of the new federal legislation requires lenders to highlight important information in plain language to make it easier for us laymen. Also wouldn’t hurt to look at competing rates. There’s also programs available to help 1st time homebuyers, be sure to do your research!

My husband called this afternoon to check in since we hadn’t heard anything in two days and he had just been busy and hadn’t made his way through all of our information. But he said he will call us tomorrow afternoon!!!

It’s a small bank that has a couple of branches locally, they’re just trying to help us out by making the terms something that we can afford to pay. The location is gorgeous, on the edge town overlooking a corn field. I’m a farm girl and we live in the midwest, the location is ideal for building our futjure. The town is less than 300 and they’re just trying to build the town a bit more by having this development. It’s all through the bank and we talked the president so he can basically decide anything he wants. Haha.

@MrsMc77: Thanks! I really don’t want to wait another day to tell everyone, though!!! Plus, I go back to school on Sunday and won’t be able to meet with the banker or architect and my husband works crazy hours – sometimes up to 80 a week – so it’s difficult for him to get off the farm. I just really really really want everything to work out. It would be so freaking wonderful!!!

@j_jaye: I agree, I’m sorry but this is giving me the heebiejeebies. 40 years, 3.5% down…I just can’t imagine. We’re at the maximum term in Canada at 25 years and that is a good chunk of our lives as it is. Just make sure it gets checked over, and over, and over. It will definitely be worth paying a lawyer to look over this for anything sneaky and please remember your mortgage broker is not your friend. They aren’t looking out for you.

Am I reading this right–the president of the bank is trying to encourage you to buy a house “they” are building? Meaning he is somehow involved in this house development? That is a HUGE conflict of interest and a big red flag. Now he has an enormous profit motive to approve you for a loan you can’t actually afford. I am sorry, but that sounds fishy, if not outright illegal. Please don’t let your enthusiasm let you make a mistake you will regret for the rest of your life. Buy only what you can comfortably afford! And I do mean *comfortably*. What if one of you gets laid off? And it doesn’t sound like the housing market in your area is strong at all–it’s highly possible that they’re trying to dump property that they would have to take a loss on. Be careful! At the very least, get an impartial 3rd party such as an accountant or a lawyer in that field to look over the contract for you. The expense at the start could save you years of heartache later on.

It is a development by the bank that they are working with a local architect and builder to get built. As I mentioned earlier, they are doing this so the town can gain population. It is very centrally localized, but, once again as I mentioned before, we are in the midwest, so a lot of the houses available are over a hundred years old and are not kept up – not houses pople want to live in forever.

The house is not built yet. They’re working on one right now and they were planning to start another one this fall, whether any buys it ahead of time or not. I understand how this may raise flags for many people reading this, but we know the president, he knows us, and he’s not trying to pull one over on us and he’s not trying to force us into this development either.

My husband’s uncle has some property on that he said we could build on that is across the road from the golf course right outside of town. The banker said he would not be able to give us the same mortgage with 3.5% down if we were to build in another town, but as this property is next to the town he is from, he would be willing to help us get the house we want and help grow the town.

We of course would take it to someone else to review the terms and make sure we’re not being screwed over. For now, I’m just excited about the possibilty of owning a house, but not the point that I would go into something we couldn’t afford. We gave him a low number of what we could afford, even though we could have gone higher and still have been comfortable and he said he could work with it.

And my husband actually works for my uncle so there is only 1% chance that he would get laid off and I am still in school. We have our bases covered on how we would pay for the mortgage if we do run into trouble, the 3.5% is not all of our savings.

Thanks for the concern, but for now, I’m going to stay excited about the phone call!!!!!!!!!

@MrsCanoodle:“The banker said he would not be able to give us the same mortgage with 3.5% down if we were to build in another town, but as this property is next to the town he is from, he would be willing to help us get the house we want and help grow the town. “

…why? Nevermind 3.5% down is an incredibly low amount, but why only in his development? What is he getting out of this?

I’m sorry and I know you’re excited and will go through with this anyway BUT…the more info you give the more worried I get. Sorry 😐

Also, around here if you can’t provide 20% down you have to get mortgage insurance where you are basically paying the insurance premiums on behalf of the bank so the bank (not you!) doesn’t take a loss if you default on your mortgage. Does that apply where you are?